Monday, December 19, 2016

IN 1856, just five years before the outbreak of the Civil
War, the Charter Oak Life Insurance Company printed a pamphlet offering life
insurance. For just $2, Kentucky,
Missouri and Tennessee residents, for example, could purchase a 12-month policy
from the Hartford-based insurer – premium obviously was based on age; older the
person insured, costlier it was. Though
the company no longer exists, these policies are drawing increasing attention
nearly 150 years later because of a lawsuit that was filed in United States
District Court in Brooklyn ! Do you find
anything odd or eerie !

Life
Insurance is not my cup of tea ~ and my first learning of the same was
naturally from following Cricket. 25th June 1983, Kapil Dev standing
proudly with the Cup – Prudential World Cup, made me read about - Prudential
plc, an international financial services group with significant operations in
Asia, the US and the UK. Prudential was
founded in London in 1848 – and one of its divisions is Insurance (Life
Insurance). As Cricket fans would know,
the inaugural Cricket World Cup was
hosted in 1975 by England, the only nation able to put forward the resources to
stage an event of such magnitude at the time. The first 3 (in 1975, 1979 &
1983) were played in England, matches
consisted of 60 six-ball overs per team, played during the daytime in
traditional form, with the players wearing cricket whites and using red cricket
balls.

Life insurance is a
contract insurer promises to pay a
designated beneficiary a sum of money (the benefit) in exchange for a premium,
upon the death of an insured person (often the policy holder) or on maturity of
the policy. Depending on the contract, other events such as terminal illness or
critical illness can also trigger payment. Life Assurance dates back to centuries, often
referred to he one traced to William Talbot and Sir Thomas Allen. As in most forms of insurance, there is ‘Sum
assured’. Sum assured is the amount that your
beneficiary will get if you die during the policy term. According to one thumb
rule, quoted by many financial planners, this sum assured should be at least
12-15 times your annual expenses or 8-10 times your annual income. If you have
a debt, such as a home loan, factor in that too when calculating your cover.

Insurance Regulatory and
Development Authority (Irda) has mandated a minimum level of insurance in these
products so that they don’t end up being pure investment products. The minimum
cover depends upon your policy term and age.
The minimum sum assured or the death benefit on a life insurance policy
shall not be less than 10 times the annual premium for individuals below 45
years of age. And for individuals above 45 years of age, minimum sum assured is
7 times the annual premium.

Though it makes
a sad reading, it is a fact that there existed slavery ! – man enslaving fellow
humans !! Slaves were considered property, and they were property because they
were black. Their status as property was enforced by violence -- actual or
threatened. Enslaved
African Americans could never forget their status as property, no matter how
well their owners treated them. Human beings who live and work together are
bound to form relationships of some kind, and some masters and slaves could genuinely have cared for each other; however, the caring
was tempered and limited by the power imbalance under which it grew. Masters and slaves were never equal.

This is no post on ‘treatment lf slaves’ – but on
insurance of slaves, who were even treated as cargo when in transit and
policies inured to the benefit of masters. Slave insurance in the United States has
become a matter of historical and legislative interest. In the history of
slavery in the United States, a number of insurance companies wrote policies
insuring slave owners against the loss, damage, or death of their slaves. The
fact that a number of insurers continue the businesses that serviced these
policies has brought attention to this history.

Now, if you are to read
the first para again, in 1856, just five years before the outbreak of the Civil
War, the Charter Oak Life Insurance Company printed a pamphlet offering slave
owners in six Southern states the option of insuring the lives of their slaves.
For just $2, Kentucky, Missouri and Tennessee residents, for example, could
purchase a 12-month policy from the Hartford-based insurer on a 10-year-old
domestic servant that would yield $100 if the slave died. Policies for older
slaves, like a 45-year-old, were more expensive, costing the slave owner $5.50
a year.

Though the company no
longer exists, these policies are drawing increasing attention nearly 150 years
later because of a lawsuit that was filed in United States District Court in
Brooklyn, in late March against Aetna Inc. and two other companies, claiming
that they profited from the slave trade. In Connecticut, where insurance has
long been a principal industry, the documents exhibit a painful reminder of the
past, especially in a Northern state that is proud of its abolitionist
ancestors like John Brown. ''It's not
pleasant to talk about it today, to put it mildly, but slaves were insured just
like any other thing that the farmers owned, that the slave owners owned,''
said Tom Baker, director of the Insurance Law Center at the University of
Connecticut School of Law.

New York Life, the
nation’s third-largest life insurance company, opened in Manhattan’s financial
district in the spring of 1845. The firm possessed a prime address — 58 Wall
Street — and a board of trustees populated by some of the city’s wealthiest
merchants, bankers and railroad magnates. Sales were sluggish that year. So the
company looked south. There, in Richmond, Va., an enterprising New York Life
agent sold more than 30 policies in a single day in February 1846. Soon,
advertisements began appearing in newspapers from Wilmington, N.C., to
Louisville as the New York-based company encouraged Southerners to buy
insurance to protect their most precious commodity: their slaves.

Alive,
slaves were among a white man’s most prized assets. Dead, they were considered
virtually worthless. Life insurance changed that calculus, allowing slave
owners to recoup three-quarters of a slave’s value in the event of an untimely
death.

James De Peyster Ogden,
New York Life’s first president, would later describe the American system of
human bondage as “evil.” But by 1847, insurance policies on slaves accounted
for a third of the policies in a firm that would become one of the nation’s
Fortune 100 companies. Georgetown, Harvard and other universities have drawn
national attention to the legacy of slavery this year as they have acknowledged
benefiting from the slave trade and grappled with how to make amends. But
slavery also generated business for some of the most prominent modern-day
corporations, underscoring the ties that many contemporary institutions have to
this painful period of history. Like New
York Life, Aetna and US Life also sold insurance policies to slave owners,
particularly those whose laborers engaged in hazardous work in mines, lumber
mills, turpentine factories and steamboats in the industrializing sectors of
the South. US Life, a subsidiary of AIG, declined to comment on its slave
policy sales. Wachovia, one of Wells Fargo’s predecessor companies, has
apologized for its historic ties to slavery as have JPMorgan Chase and Aetna.

More than 40 other firms,
mostly based in the South, sold such policies, too, though documentation is
scarce and most closed their doors generations ago. New York Life survived. Its
foray into the slave insurance business did not prove to be lucrative: The
company ended up paying out nearly as much in death claims — about $232,000 in
today’s dollars — as it received in annual payments. But in the span of about
three years, it sold 508 policies, more than Aetna and US Life combined,
according to available records. Now, the descendants of one of those slaves —
who were recently identified by The New York Times — are coming to terms with
the realization that one of the nation’s biggest insurance companies sold
policies on their ancestors and hundreds of other enslaved laborers.

Policy No. 447 covered
Nathan York, a slave who toiled in the Virginia coal mines where the earth
often collapsed on its subterranean work force. Policy No. 1141 insured a slave
known as Warwick, who fed the fiery furnaces on a Kentucky steamboat. Policy
No. 1150 covered Anthony, who labored amid the whirling blades of a sawmill in
North Carolina. The handwritten record of sales, insurance premiums and
expenditures, many described here for the first time, illuminate the inner
workings of a company born before the Civil War. That history has stirred
anxiety among some New York Life executives, who take pride in their
multiracial work force and customer base. They worry that news coverage about
the company’s ties to slavery may overshadow their efforts to provide
philanthropic support to the black community.

Insurance
companies have gone on record putting their profound regret of their erstwhile
act of such insurances. The recent
newsitem of NY Times put that - Officials typically insured the lives of white
customers for $1,000 to $5,000 in the early years. Slaves, on the other hand,
were considered property under the law and were typically insured for about
$400, the records show, and some for as little as $200. Payouts from death
claims usually went to the grieving relatives of white customers. In the case of
slaves, however, it was the slave owners — who insured their laborers and paid
the annual premiums — who collected.

The facts and figures and more importantly the cause of action [the
nature of death of such insured slaves] makes a sad and disturbing reading ..
.. ..